Europe's certification complex

Millions of Europeans, from bartenders to soccer stars, have to deal with what might be called the certification complex – a requirement that they be certified to pursue their jobs. The time-consuming process dates back to 19th-century apprenticeships and economists say it is a big reason behind the continent's high unemployment and lagging productivity.

Unemployment in the 12 countries that use the euro is averaging about 9 percent, compared with about 5 percent in the United States.

In the European Union (EU), 43 percent of unemployed people have been out of work for more than a year compared to 12 percent in the United States.

In most cases, the politicians argue, the system makes sense because society needs fully qualified surgeons and police officers. Their argument is that it weeds out the incompetent. But it also kills entrepreneurship and discourages people from seeking new jobs, says Peter Morici, an economics professor at the University of Maryland.

Apprenticeships worked "fine when only 5 percent of the population is educated, but not in a society where 75 percent of the population is educated, "explains Morici.

German business, government and unions see apprenticeship rules as guarantees of the nation's traditional emphasis on quality, yet, across the Continent, businesses are calling for change.

Source: John W. Miller, Europe's 'Outdated' Job Rules, Wall Street Journal, August 16, 2004; and Organisation of Economic Co-operation and Development, Background Paper: The Competitiveness of European Industry-1999 Report for the OECD Business and Industry Policy Forum on Structural Factors Driving Industrial Growth, February, 2000.

For WSJ text (subscription required) http://online.wsj.com/article/0,,SB109260191286991777-search,00.html

For OECD text http://www.oecd.org/dataoecd/41/40/1860032.pdf

For more on Economic Freedom and Growthhttp://www.ncpa.org/iss/int/

FMF Policy Bulletins\31 August 2004